Are you sure that energy is a fungible good? Energy is neither free to transport, nor is demand for energy insensitive to location. If energy were fungible, you

Are you sure that energy is a fungible good? Energy is neither free to transport, nor is demand for energy insensitive to location. If energy were fungible, you wouldn't see energy pricing that varies by an order of magnitude or more. Something like oil on the other hand is quite fungible, but kwh of electricity is not. Note that fungibility depends on the user: Bitcoin miners are fungible consumers, a house in Hudson Valley is not. > Won't the amount of mining grow until all the electricity cheaper than that is being wasted calculating hashes? No, there is an upper bound (negating transaction fees, which are negligable) in that the cost of the energy used will never be larger than the block reward times the bitcoin price. There are estimates that this actually isn't a large enough market for the situations where bitcoin mining is actually a very beneficial consumer in terms of environmental concerns-- e.g to consume all of the methane flare gas (that would otherwise be burned off).